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If you have negative gamma, it's difficult to earn money by collecting theta when you spend lots of time neutralizing delta. You will be scalping for negative dollars. You should be delta and gamma neutral only when you do not want to be exposed to the risk involved with non-neutral...

You may find that your insurance policies reap big dividends! IB recommends having another account elsewhere. Mark

Not everyone trades the same, but... Many trades have limited profits and limited losses. But most of the time, losing the maximum is a bad result and the trade should be adjusted to prevent that. But, to me the collar is a bit different. I recommend owning a collar to manage risk...

Mark

Mark

The problem with Max Pain is that it discussed among people who don't know much about options. Then the story gets spread, and more people believe it. Among those who know how options work, it's obvious that max pain is a myth. But there is no way to calm the masses. Mark

You are paranoid. No one is pinning the stock to rob you. Don't believe what you read on Yahoo finance forum. It's a bunch of ill-informed people yakking. No one is pinning the stock. Period. Just because you expected the stock to drop by $2 doesn't mean it will do that. Stocks...

1) Yes, it is POSSIBLE that it's better to exercise the option, rather than sell it. But that situation does not occur often. 2) SELL the option is the best, simplest, quickest, and least costly choice. But, if the bid for the call is below the intrinsic value of the option, then you...

For future reference, it is impossible for an exchange to trade either calls or puts and not both. Mark

You never learn that you were assigned an exercise notice until the following morning. Never. As Mark told you, the OCC issues assignment notices long after trading ends for the day. If you are no longer short the option at close of business, you cannot be assigned an exercise notice. Mark

NOOB< Ask yourself this question: If a stock is trading at 50.00 and you own an expiring 50 call, would you exercsie it mid day? The answer better be NO. What do you have to gain? If the stock is above 50 at day's end you can exercise then (automatic exercise). If it is lower...

You did not ask, but just in case you own some options. DO NOT ENTER A MARKET ORDER AT THE OPENING. If you want to sell quickly, be ready with a limit order as soon as you see the real quotes. Mark

Perfectly appropriate discussion. No apology necessary. An iron butterfly is equivalent to the butterfly. Thus trading one in place of the other is not a contradiction. The iron condor and condor are also equivalent. I prefer irons because I like to collect the premium. But it...

1) You win 50 cents 75% of the time 2) You can lose up to $4.50, 25% of the time. Does this sound like a good deal to you? It shouldn't. It's a horrible deal. Yes, you must cover some positions early. You are not going to win over the longer-term if you hope each position expires...

It's not a strategy. The logic is this: When markets decline, people become afraid. They buy puts for protection. That order surge increases option prices and thus, implied volatility. On rallies, people become less afraid and the demand for options is reduced. At least the buyers are...

[aside to Mark S. It's everyone's thread] Walt, some rambling thoughts: It begins with the trades made. It also depends on how well the trades go during the month. It most;y depends on the size you trade. I have earned 15-20% in one month several times. But never consistently. And I...

That information is no help. For example, if your position is naked long puts, then you own lots of vega and will lose money on a rally - and an IV decrease will hurt even more. If you are naked short calls, or are short call spreads, then you will lose money on a rally, due to delta. But...

You can pay 70 cents per contract (a one-lot is $1.00) at IB You can pay $0.65 per contract + 4.95 at TK Mark

The reply was directed to readers of this blog, it was not directed to the moron who wrote it. I hoped that difference would be recognized. Mark

NOTICE TO ALL PROS ON THIS FORUM; IF YOU BELIEVE I AM MISTAKEN AND THAT THIS MORON IS CORRECT, I INVITE YOU TO SO STATE. Thank you Mark